Religare Enterprises Ltd said on Wednesday that one of its arms has formed a 50:50 joint venture with Milestone Capital to manage a Rs 600 crore healthcare and education fund. Religare along with its affiliates have committed to contribute Rs 60 crore to the fund which has an existing corpus of more than Rs 100 crore. The fund will be raised in India, the statement said, without specifying if it would be 100% domestic capital.
Religare Venture Capital Pvt Ltd, the wholly owned subsidiary of Religare Enterprises, and Milestone Capital will hold equal equity stakes in the JV, which will manage the fund.
The minimum investment amount will be Rs10 lacs; the life of the fund will be 5 years and 18 month will be the commitment period, it said.
Religare has also drawn on some senior medical professionals from its group, a statement said. This would help in healthcare investing, although not so much in education. Religare Enterprises is promoted by the Singhs, the former promoters of Ranbaxy Pharmaceuticals. They also own India's largest medical care chain Fortis Healthcare.
"Private equity has been an area of great interest to us given the mangement’s experience of managing and ramping up businesses at a fast pace. Healthcare and Education are two sectors which we believe are poised for balanced growth and we have the requisite domain expertise on healthcare which we intend to leverage for larger benefit of investors of the fund,” Sunil Godhwani, CEO &MD, Religare said.
Milestone is founded by Ved Prakash Arya, who was earlier with Pantaloon Group. Milestone's India Build Out Fund-I (IBF-I) was launched in August last year with a target of $150 million (Rs 600 crore). It also had said that it had a further green shoe option of $50 million. This was the intention at the boom time last year, while the context has changed right now. As of now, the fund has managed to raise only Rs 100 crore ($25 million).
The fund had said last year that it would invest in sectors such as education and media & entertainment. Now the focus has been expanded to healthcare too. Milestone had also hired Rajesh Singhal from Intel Capital to spearhead the fund.
Milestone seems to be following a partnership model for their funds. In an earlier instance, Milestone had partnered with IL&FS Investment Managers to manage a REIT like structure.
Religare also have a JV model. They formed a PE JV - Vistaar Religare Film Fund - for investing in films and production companies. This JV with Milestone will take Religare's PE activity to other areas as well.
Religare currently has joint ventures for the other financial services such as with Aegon for life insurance and with Macquarie for wealth management.